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At a time when the advancement of Bitcoin technology is mushrooming in prominent nations such as the United States, Israel, Switzerland and Great Britain, giving rise to mainstream venture capital investment in firms which aim to shore up the future of virtual currency, as well as regulatory approval to drive technology forward, nations with floundering economies have viewed virtual currency somewhat differently.
Indeed, rather than providing keen developers with the best possible environment to produce cutting edge, modern methods of payment, certain jurisdictions with a less avantgarde approach financial technology have shown disdain for Bitcoin – until now.
Today it has emerged that the Spanish government has released a set of new rules which identify Bitcoin as an above board electronic payment system.
The southern European nation, which currently faces severe financial difficulties and stratospheric youth unemployment percentages, has undergone a process which was led by domestic Bitcoin startup Coinffeine.
In April this year, Abanlex Abogados, a specialist law firm which assists companies in the technology, data protection and internet sector applied for information from the Spanish Ministry of Finance and Public Administration (El Ministerio de Hacienda y Administraciones Públicas) in conjunction with Spanish congress in order to obtain official perspective on the definition of Bitcoin.
At that time, the Ministry of Fiannce’s department which is responsible for licensed gambling, (Dirección General de Ordenación del Juego, or DGOJ) as well as the Spanish congress specifically stated that Bitcoin is categorized as an electronic payment system.
In order for the gambling companies based in Spain that DGOJ oversees to operate their businesses and accept Bitcoin, DGOJ stated in its reply to Abanlex Abogados that they should apply for a gambling license and a relevent individual license, just as they would be required to do if accepting any other form of payment from customers.
As Spain’s Congress recognized Bitcoin as an electronic payment system, additional rules should apply to Bitcoin businesses, including the current law prohibiting cash payments to a business of more than €2,500, noted Abanlex Abogados, referring to the Article 7 of the Law 7/2012.
Coinffeine’s CTO and co-founder Ximo Guanter told Coindesk the new rulings were a positive sign for Bitcoin regulation in Spain “The ‘big-theme’ news here is that Spain is starting to treat bitcoin more like a currency than as an asset, which is the inverse of what the US has done.”
Bitcoin proponents in the Spanish-speaking world have until now been confined to South America, a region in which stringent capital control laws and high inflation levels in sovereign currencies in Argentina have generated vast demand for services which can be settled in Bitcoin. Indeed, by summer 2013, with US dollar outlawed and 20% inflation, an astronomic and unrealistic government-controlled exchange rate for tourism. plus levels of confidence in the Peso being very low, Bitcoin values in Argentina rose to 30% to 40% higher than in neighboring Uruguay, with numerous retail stores, restaurants and service industries removing their merchant services terminals for use with Visa or Mastercard in favor of Bitcoin.
Spain could be set to follow suit in its use of Bitcoin as a mainstream payment method following the new rulings, with Madrid’s fashionable Serrano Street being dubbed Calle Bitcoin (literally Bitcoin Street) by enthusiasts in a bid to ensure digital currency’s popularity among fashion haute-couture outlets. Such groups bear similarity to Argentina’s Bitcoin meetup scene, which convened several times last year at the Bar Duarte venue in Buenos Aires’ fashionable Palermo subdivision.